The approach to understanding the determination of real GDP and the price level that emphasizes flexible wages and prices and competitive markets is
A)the classical model.
B)the Keynesian model.
C)Adam Smith's Law.
D)the aggregate demand model.

Question

Quizplus · Accepted Answer

The classical model emphasizes the role of flexible wages and prices in determining real GDP and the price level in competitive markets. It assumes that the economy will automatically adjust to full employment equilibrium through the self-correcting mechanism of market forces without the need for government intervention.

The Approach to Understanding the Determination of Real GDP and the Price